Today’s Social Security column addresses questions about how the earnings test affects Social Security benefits while on the job, whether benefits automatically switch to retirement benefits at 70 after limited application, and whether an employee’s disability benefits affect survivor benefits claimed on their record. Larry Kotlikoff is a professor of economics at Boston University and the founder and president of Economic Security Planning, Inc.
See more Ask Larry answers here.
Do you have questions about social security that you would like to see answered? Ask Larry about Social Security here.
When can I start working and still keep my Social Security?
Hi Larry, I am 65 and retired. When can I start working and keep my Social Security benefits without incurring a fine? Thank you, Tomas
Hi Tomás, Depending on how much you earn, you may now be able to work and receive benefits. In 2021, people under full retirement age can earn up to $18,960 without losing any benefits, but they will lose $1 in benefits for every $2 they earn above that amount.
The exempt amount is higher (i.e. $50,520) for people who reach FRA before the end of the year, and only amounts earned before the month a person reaches FRA count toward that limit. In addition, for people who reach FRA before the end of the year, $1 in benefits will be withheld for every $3 of their excess earnings.
If you ask when you can earn an unlimited amount and still receive benefits, it will be from the month you reach FRA. FRA dates are different depending on a person’s year of birth.
You may want to consider using my company’s software — Maximize My Social Security or MaxiFi Planner — to fully analyze your options so that you can make informed decisions about your best strategy to maximize your benefits and avoid unknowingly wasting money. leave the table. Social Security calculators provided by other companies or non-profit organizations can provide good suggestions if built with extreme care. Dear Larry
Do I automatically switch to my pension when I turn 70?
Hi Larry, I have received my Social Security benefits for divorce. I’m turning 70 soon. Will Social Security automatically switch me to my Social Security retirement benefit or do I have to file a document for this to happen? Thank you Cynthia
Hi Cynthia, I assume you mean you were born before 1/2/1954 and you filed a limited application for divorce benefits only when you reached full retirement age (FRA). If so, you’ll need to file a full Social Security retirement benefit claim to switch to your own account.
When a person files a limited application for only spouse or divorce benefits, they must specifically limit their own benefits to the scope of their application. That would mean you haven’t applied for your retirement benefits yet, so you’ll need to apply when you want to receive your retirement benefits. Dear Larry
Does the fact that my husband received disability benefits affect my survivor benefits?
Hi Larry, My husband was receiving Social Security disability benefits six years before his death at age 64 with an allowance of $2,480 per month. I’m 58 and understand that I can’t get survivor benefits until after I’m 60 and at a reduced rate after that, but I’ll probably start them at age 60. Will his disability benefit affect my survivor benefits?
His benefit will also increase after his death, since I still have 16 months after his death before I can claim his benefit. Is there a better strategy you can see for my situation? I have a work history, but not close to its advantage. Thank you, Tracy
Hi Tracy, my condolences on your loss. The fact that your husband received Social Security benefits before his death doesn’t affect your widow’s rate at all.
It sounds like your non-reduced widow’s rate would be equal to your husband’s full rate, including all living expenses (COLA) that occur after his death. But to get a non-reduced widow’s rate, you must wait until your full retirement age (FRA) to receive the widow’s benefits.
So in other words, if you don’t start drawing the widow’s benefit until FRA, it sounds like you qualify for the full amount that your husband would have received if he were still alive when you start drawing. If instead you start receiving your widow’s benefit when you turn 60, your age rate will be reduced by 28.5%.
And that discount is permanent unless one of your benefits is withheld because you work and earn too much to collect all your benefits. The only way you can qualify for widow’s benefits before the age of 60 is if you are disabled.
If your own Social Security retirement benefit rate were significantly lower than your widow’s rate, your optimal strategy might be to pull your own benefit from 62 to FRA and then apply for non-reduced widow’s benefits from FRA.
My company’s software can show you what your payout rates would be if you apply for them at different times. Other calculators can help just as well if they are very carefully designed and consider the same details. Dear Larry